Sales and Sales Management Blog

Over the years I’ve worked with thousands of sellers who have sought to move their sales business from a catch-as-catch-can prospecting business to a solidly referral-based business.  Most have been successful, but a few have refused to acknowledge and adhere to four basic “laws” that are critical for becoming referral-based.

1.  Your Client Does Not Owe You Referrals.  So often I hear trainers and managers tell sellers to expect referrals because clients owe them for doing a good job.

    Bull.

   Your clients paid for the products or services you rendered.  They owe you NOTHING.

   That doesn’t mean you can’t get lots of great referrals.  You can.  But instead of expecting them because they are owed you, let your client know that your business is based on referrals and that you want to earn their referrals.  Then ask them what they expect to happen during the course of the sale.  Once you know what they expect, ask them that if you deliver on their expectations would you have earned their referrals.  If your client knows you want referrals and you make it clear how you will earn them, the majority of your clients will agree to give them once earned.

2. If You Want Great Referrals, You Will Have to Uncover Them for Your Client.  Most clients really have no idea who to refer to you even after you’ve defined for them who your ideal client is.  They’re not in your business.  They don’t know all of the things you can do for a client.  It isn’t their job to know who to refer to you—it’s your job to help them make great referrals.

   Instead of waiting and hoping your client comes up with a quality referral or two at the end of the sale, take the time during the sales process to find out who your client knows that you know you want to be referred to and then, instead of asking a lame question like, “Mr. Client, do you know of anyone else that might be able to benefit from my products or services?,” ask for a referral to the specific person or company that you’ve discovered your client knows that you know you want to be referred to.

   Yes, this is much harder than just asking the general referral question, but it is many times more effective.  It takes detective work.  It takes time to learn to be constantly on the lookout for who your client knows.  It takes learning how to listen, to ask questions, to observe, to make all of your senses aware of what’s going on.  But the payoff is a strong, referral-based business.

3. A Name and Phone Number of a Prospect is Not a Referral.  So, you worked with your client and got the name and phone number of a potential prospect from them.  Do you have a referral?  No, you have a name and phone number of a potential prospect.

   A referral is NOT simply a name and phone number.  Just getting a name and phone number is little better than making a cold call to the person.  Instead of a name and phone number, you want a personal introduction to the prospect from your client.

   Again, this is more difficult than just getting a name and number and picking up the phone to call them.  A personal introduction can be through a letter of introduction from your client (that you write for the client’s signature), a phone call from your client to the prospect introducing you, or a lunch or coffee meeting with your client and the prospect.  However you manage it, it must be a direct introduction from your client to prospect.

4. Referrals Are Not Always Good.  Not all referrals are of the same value.  Certainly you know that.  But do you know that some referrals can actually harm your prospects of working with a prospect?

   How so, you ask?

   We all have clients who have referred us to people who trust and respect the client.  When we meet these referred prospects we are working from a position of strength because some of the trust and respect they have for our client is imbued to us simply by being referred by someone they trust and respect.

   But the opposite is also true.  Sometimes clients refer us to people who distrust and disrespect our client.  In those cases we are working from a position of weakness when we meet these prospects because some of the distrust and disrespect they have for our client is imbued to us also.  The more they distrust and disrespect our client, the weaker the position from which we start—sometimes to the point that we are better off not having the client introduce us.

   What is your client’s relationship to the referred prospect?  Don’t know?  Better find out before you ask to be introduced or you just might be surprised with the situation you find yourself in.

You can become a referral-based seller if you learn the laws of referral generation.  It takes a lot more than asking some weak “referral” question.  It means really getting to know your client.  It means really earning the referrals.  It means involving your client in the process while making giving great referrals easy for them.

Pay attention to these laws and you’ll find it a lot easier and more fun to get great referrals—and that’s a whole lot easier than pounding the phone cold calling.